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Temp Walls

Temp Walls Franchise Management, LLC
https://www.tempwallsystems.com
1-980-264-7000
107 Parr Drive, Huntersville, North Carolina 28078

Initial Investment Range

$154,444 to $941,444

Franchise Fee

$64,900 to $249,900

We offer qualified individuals and entities the right to operate a business offering the rental, installation and servicing of modular containment systems inside existing commercial buildings such as hospitals, office buildings, and retail centers under our then-current proprietary mark.

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Temp Walls April 25, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: July 16, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
4
3
3

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor, Temp Walls Franchise Management, LLC (Temp Walls LLC), discloses a significant Members' Deficit (negative net worth) of ($2,851,951) and a net loss of ($1,017,979) for 2024. This weak financial condition, highlighted as a "Special Risk" and acknowledged by regulators in multiple state addenda requiring fee deferrals, raises serious questions about its ability to provide long-term support, fund system growth, or withstand economic challenges, increasing your investment risk.

Potential Mitigations

  • Your accountant must conduct a thorough review of the audited financial statements, including all notes, to assess the franchisor's viability and reliance on franchise fees.
  • Discuss the implications of the negative net worth and ongoing losses with a business advisor to evaluate the long-term stability of the brand.
  • Your attorney should analyze the protections offered by any state-mandated fee deferrals or financial assurance requirements.
Citations: Item 4, Item 21, FDD Exhibit J

High Franchisee Turnover

High Risk

Explanation

Item 20 data indicates very rapid growth, expanding from 10 to 261 franchised outlets in two years. However, a footnote to the terminations table reveals that four terminated franchises in Texas were not included in the termination count, which officially reads as zero. This discrepancy raises concerns about the transparency and accuracy of the reported turnover data, potentially masking underlying issues within the rapidly expanding system.

Potential Mitigations

  • Your attorney should question the franchisor about the discrepancy between the termination table and its footnote to understand the full picture.
  • Engaging a business advisor to analyze the franchisee turnover rate, including the undisclosed terminations, is critical to assess system health.
  • Contact a significant number of former franchisees listed in the FDD to learn why they left the system.
Citations: Item 20

Rapid System Growth

High Risk

Explanation

The system has grown extremely quickly, from 10 franchised outlets at the start of 2023 to 261 by the end of 2024. When combined with the franchisor's poor financial condition as shown in Item 21, this rapid expansion may indicate that its support infrastructure is strained. A risk exists that the franchisor may be unable to provide adequate training, site support, and operational guidance to its large and growing number of franchisees.

Potential Mitigations

  • With your business advisor, thoroughly question the franchisor about its infrastructure and staffing plans for supporting this rapid growth.
  • Interview a broad range of existing franchisees, both new and established, about the current quality and responsiveness of franchisor support.
  • An accountant should review the franchisor's financials to determine if it has the capital to sustain its support obligations during this growth phase.
Citations: Item 20, Item 21

New/Unproven Franchise System

High Risk

Explanation

Temp Walls LLC began offering franchises in June 2021 and has a limited operating history, a fact highlighted by the franchisor as a "Special Risk." Investing in a newer system carries inherent risks, including unproven long-term market viability, potential weaknesses in operational support, and limited brand recognition. The franchisor's ability to effectively manage its rapid growth and navigate market challenges over time is not yet fully established.

Potential Mitigations

  • A business advisor can help you conduct extensive due diligence on the long-term market demand for this specific service.
  • Speaking with the earliest franchisees in the system is crucial to understand their experience with the evolving support and systems.
  • Your attorney should help you assess the risks associated with a young system and whether the potential rewards justify them.
Citations: Item 1, Item 2, Item 20, Item 21, Special Risks section

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. A fad business is one tied to a fleeting trend, which can threaten its long-term viability. When considering a franchise, it is important to assess whether it has staying power and can adapt to changing consumer preferences, as your contractual obligations will continue even if public interest declines.

Potential Mitigations

  • Assess the long-term market demand and the core need for the product or service with a business advisor.
  • Investigate the franchisor's history of innovation and its plans for future adaptation to stay relevant in the marketplace.
  • Your accountant can help you model the financial impact of potential declines in consumer interest.
Citations: Item 1, Item 11

Inexperienced Management

Medium Risk

Explanation

While the franchisor itself is young, the executive team disclosed in Item 2 appears to have significant experience in franchising and related home service industries. For example, the President, CEO, and other officers have held leadership roles at other franchise brands. However, the success of this specific venture under their management is still being established.

Potential Mitigations

  • A business advisor can help you vet the management team's track record and past performance with other franchise concepts.
  • When speaking with current franchisees, inquire specifically about their perception of the management team's competence and support.
  • Your attorney can help you research the history of the other franchise systems managed by this executive team.
Citations: Item 2, Item 11

Private Equity Ownership

Medium Risk

Explanation

Item 1 discloses a complex corporate structure under the Homefront Brands umbrella, which includes multiple other franchise systems. The franchisor is also scheduled to become a subsidiary of HFB Franchisor Holdings, LLC. While not explicitly stated to be private equity-owned, this structure can present similar risks, such as a focus on system growth over individual unit profitability or potential conflicts of interest among the affiliated brands.

Potential Mitigations

  • Your attorney should research the ultimate parent companies to understand their business model and history with franchise brands.
  • Discuss the corporate structure with your business advisor to understand potential impacts on support and brand focus.
  • Ask current franchisees about their experience with the parent organization and any changes since its involvement.
Citations: Item 1, Item 2

Non-Disclosure of Parent Company

Medium Risk

Explanation

The FDD discloses an extensive network of parent and affiliate companies under the Homefront Brands umbrella. While the franchisor's financials are provided, the financial health of the ultimate parent entities that provide shared services and strategic direction is not disclosed. Given the franchisor's own weak financial state, the stability and resources of the broader parent organization are material to your investment risk, but this information is not available for review.

Potential Mitigations

  • Your attorney and accountant should review the structure and insist on receiving financial statements for any parent entity that guarantees obligations or is critical to support.
  • Inquire about the nature of the shared services provided by affiliate DDL Investments, Inc. and its financial stability.
  • A business advisor can help you assess the risks of investing in a system where the ultimate parent's financial health is opaque.
Citations: Item 1, Item 21, FDD Exhibit J

Predecessor History Issues

Low Risk

Explanation

Item 1 states that the franchisor does not have a predecessor. It was formed as a New Hampshire LLC in March 2021 and converted to a North Carolina LLC in March 2022. Therefore, there are no predecessor history issues to analyze.

Potential Mitigations

  • An attorney can help verify the franchisor's corporate history to confirm the absence of any undisclosed predecessors.
  • A business advisor can assist in researching the background of the founders and their previous business ventures for additional context.
  • Focus due diligence on the franchisor's own limited track record and financial stability.
Citations: Item 1

Pattern of Litigation

Low Risk

Explanation

Item 3 states, "No litigation is required to be disclosed in this Item." This indicates there is no recent or pending litigation against the franchisor involving fraud, securities violations, or other material claims as defined by franchise law. The absence of such litigation is a positive sign, though it does not guarantee a dispute-free relationship.

Potential Mitigations

  • Your attorney can conduct an independent search of public court records to verify the absence of litigation.
  • When speaking with current and former franchisees, it is still prudent to ask about their experiences with disputes, even if they did not result in litigation.
  • Maintaining open communication with the franchisor can help resolve potential issues before they escalate, a strategy to discuss with your business advisor.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
6
1
8

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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3

Financial & Fee Risks

Total: 10
3
4
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

4

Legal & Contract Risks

Total: 16
7
6
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

5

Territory & Competition Risks

Total: 5
3
2
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

6

Regulatory & Compliance Risks

Total: 10
4
4
2

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

7

Franchisor Support Risks

Total: 4
2
2
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

8

Operational Control Risks

Total: 12
4
5
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

9

Term & Exit Risks

Total: 18
4
10
4

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 1
1
0
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.